Wooing TV broadcasters is FCC's next big job for 600 MHz incentive auction

The FCC is poised to release in May its rules for the incentive auctions of 600 MHz broadcast TV spectrum. However, that will just be the beginning of the FCC's work: After releasing the rules, the agency will need to convince TV broadcasters to participate in the auction by first relinquishing their spectrum.

"It would be a mess if you gave a party and nobody came," FCC Chairman Tom Wheeler told FierceWireless shortly after he took office last November.

On Tuesday, Wheeler addressed the National Association of Broadcasters conference in Las Vegas and said that the incentive auctions a once-in-a-lifetime opportunity to invest in their own businesses "on someone else's dime," according to CNET.

Wheeler pushed back against allegations that the FCC is going to force broadcasters to give up their spectrum. "There is no conspiracy," he said. "Those who want to participate in the auction can. And those who don't, that's fine."

Despite Wheeler's statements, broadcasters remain on the fence. On Monday, NAB President Gordon Smith said that "NAB has worked tirelessly for the past year-and-a-half to help the FCC deliver on Congress' direction to hold a voluntary broadcast spectrum incentive auction." But he added that the broadcasting industry is the only one that faces risks due to the auction.

"While we understand the goal of freeing up spectrum and believe in smart spectrum policy, an equal aim should be to ensure that broadcasters and their viewers are not harmed in the process. But at the moment it is, at best, an open question whether the FCC has balanced those aims," Smith continued, according to Ars Technica.

Gary Epstein, chairman of the FCC's incentive auction task force, said in a presentation at the FCC on Jan. 30 that once the FCC releases the auction rules in May, the task force "will emphasize our broadcaster outreach and education to ensure they understand the auction and repacking rules and procedures, and are able to use this information to make informed decisions about auction participation." Those efforts will involve contacting individual stations and broadcasting constituencies in specific markets.

Under the FCC's proposed rules, the agency will pay broadcasters to give up their spectrum, then the FCC will "repack" that spectrum so it can be auctioned to wireless carriers--broadcasters will share in the resulting auction revenues. The rules that will be released in May are expected to detail exactly how that process will work.

Harold Feld, senior vice president at public interest group Public Knowledge, said the FCC should "make the threshold for getting into the auction very easy" for broadcasters.

Recently, Wheeler praised two Los Angeles-area TV stations that conducted a pilot program to test channel sharing between broadcasters--the goal was to highlight technology that will allow broadcasters to give up some of their spectrum. However, even the stations that participated in the test have not yet decided on whether they want to participate in the auction.

Alan Popkin, director of TV engineering at one of the stations, KLCS, said he is looking forward to hearing what the FCC's rules are, as well as what prices stations should expect to get for their spectrum. "We don't have any idea at a this point in terms of what we should expect," he said. "It makes it difficult for a station to make a decision because we just don't know."

Preston Padden, a former Disney and News Corp. lobbyist who is the executive director of the Expanding Opportunities for Broadcasters Coalition, said his group has 75 stations that have expressed interest in participating in the auction--but none is committed. "I don't think anyone has made an absolute commitment, because until you have an idea of how much money you're going to get, nobody will make that kind of a commitment," he said.

Padden said that one of the great misconceptions of the auction is that the FCC is going to look to get broadcast spectrum from everywhere, across the roughly 210 broadcast TV markets in the country, when in reality it is seeking out spectrum from the top 30 to 50 most populous markets. The FCC will be able to build up a financial cushion, he said, because it will be repacking stations across the country. The commission will get spectrum from repacked markets in which broadcasters have not directly relinquished their spectrum, he said, allowing to FCC to generate auction revenues from those markets without having to directly pay broadcasters. 

However, Padden said the FCC needs to do a lot more outreach to broadcasters. "We have had unlimited access to the auction task force. They have been completely open, and cooperative and constructive," he said. "Unfortunately, they have not yet been empowered by the commissioners to start talking in terms of actual pricing. Until they are empowered to talk in terms of actual pricing, I don't think you will see the momentum grow among broadcasters for this auction."

For more:
- see this FCC site
- see this CNET article
- see this Ars Technica article
- see this CNET article

Related Articles:
Broadcasters seek more details on 600 MHz incentive auction 
L.A. TV stations show broadcast channel sharing for 600 MHz auction is possible
TV broadcasters remain wary of 600 MHz incentive auction
FCC's Wheeler lays out vision for 3.5 GHz band, incentive auctions
FCC to issue report on 600 MHz incentive auction structure in the spring

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